Just when lenders were expecting the CFPB in Washington to fade silently into the mist of the night, there were rumblings that states were considering enacting their own CFPB organizations and regulations to prevent the Trump Administration from killing consumer protection oversight. Today those rumors have gained serious traction.
According to the New Jersey Mortgage Banker’s Association today, New Jersey’s Attorney General announced that Governor Murphy will nominate Paul R. Rodriguez as Director of the New Jersey Division of Consumer Affairs to fulfill the Governor’s promise to create a state-level CFPB in New Jersey. Attorney General Grewal said that, “As the federal government abandons its responsibility to protect consumers from financial fraudsters, it is more important than ever that New Jersey picks up the mantle to protect its own residents.”
Pennsylvania’s Attorney General has already created a CFPB at the state level and it seems that this could be a trend in other states as well.
Lenders had hoped that a new Trump appointed director at CFPB would begin the move to reduce lender oversight and compliance obligations and early indications were that they may have been correct. With today’s announcement from New Jersey however, and with Pennsylvania as a model, it is a sure bet that other states will soon follow the effort to ensure that stringent oversight remains in place.
What does this means for mortgage lenders? Don’t disband your compliance departments or cancel those compliance tools just yet.